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Under pressure from unions and student groups the French government has come up with a watered down version of its original labour reforms bill.

The French government presented a watered-down version of its contested labour market reform on Monday and Prime Minister Manuel Valls appealed to unions to give it their backing.

Valls said he was hoping for a "new start" for the reforms which he said the Socialist government had modified after listening to the "questions and concerns" raised by the original text.

One of the key concessions made to opponents of the bill was an agreement to scrap a plan to limit the amount of compensation a worker could claim if they were found to have been sacked unfairly.

The limits the government wanted to place on compensation pay outs will now simply be used as guidance but judges will reserve the right to order a company to pay a sacked worker more, if they so wish.

In a significant change from the original text, Valls said small and medium-sized companies would not be able to unilaterally introduce flexible work practices into their working week.

In another slight modification judges will be allowed to investigate whether multi-nationals are faking "financial difficulties" of the French subsidiaries just to be able to lay off workers. If they are then the lay-offs will be re-classed as "unfair dismissals".

The reforms have divided the Socialist government, pitting President Francois Hollande and Valls against a range of left-wing forces 14 months before the president faces a re-election bid. On Friday, Hollande ruled out the possibility of scrapping the reforms but admitted that they "could be improved".

The reforms are part of efforts to combat stubborn unemployment in a country where employers are loath to take on permanent workers because of stiff obstacles to laying them off in lean times.

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France, the eurozone's second largest economy, is under pressure from the European Commission to bring down labour costs as well as its 10.2 joblessness rate. The reform spells out simple conditions such as falling orders or sales, or operating losses, as sufficient cause for shedding staff.

However, it sparked demonstrations by hundreds of thousands of people last week, with young people at the forefront of the protests. Opponents fear it will erode the cast-iron job security that French workers on full-time contracts enjoy.

Valls and President Francois Hollande argue the reform is aimed at freeing up the job market and reducing youth unemployment, but critics say it is another example of the government taking decisions more in tune with a right-wing agenda.

The proposals were initially set to be submitted to the cabinet last Wednesday, but in the face of the opposition last week this date was shifted to March 24th.